Stocks Rally as G20 Meets; RBS Slides 8 Percent

European markets traded higher on Friday after a rally on Wall Street overnight following a rise in the oil price, while Royal Bank of Scotland saw shares tumble following disappointing results.

The positive open comes as finance ministers from the Group of 20 meet in Shanghai to try and assuage fears over global economic growth. The Organisation for Economic Co-operation and Development (OECD) has urged the G20 to come up with an urgent policy response to stuttering growth, echoing a similar call from the International Monetary Fund.

Analysts said that this has helped to push markets higher this week.

"Today's and the weekend focus is likely to be on the upcoming G20 meeting in Shanghai coming at a time when concerns about the Chinese economy have roiled global markets," Michael Hewson, chief market analyst at CMC Markets, wrote in a note on Friday.

"The recent call by the IMF earlier this week, followed by the OECD this morning, for the G20 to take bold action at their meeting this weekend could also be a factor behind the rebound in the latter part of this week, at a time when data showed that global trade slowed sharply in 2015, led largely by a slowdown in emerging markets."

Oil prices were in the green on Friday, while the People's Bank of China head governor Zhou Xiaochuan said the central bank still has policy tools available to combat any downside risks to the economy, highlighting potential further easing. Both factors provided some help to stocks.

On the earnings front, Royal Bank of Scotland reported a full-year loss of £1.97 billion ($2.76 billion), narrowing from the £3.47 billion recorded the year before. RBS, which is owned partly by the government after being bailed out during the financial crisis, has not turned a profit since 2008. The bank's stock tanked as much as 10 percent before paring some gains.

Elsewhere in the banking sector, Denmark's Erste Bank was up over 2 percent after the lender reported better-than-expected fourth-quarter next profit.

And International Airlines Group (IAG), the owner of British Airways, posted a 65 percent rise in annual operating profit, beating analyst estimates. Shares were mildly higher.

Meanwhile, Spain's Telefonica reported a fourth-quarter net loss of 1.83 billion euros ($2 billion) versus a net profit of 303 million euros a year earlier. For the full-year however, Telefonica's net profit was 2.75 billion euros. The telecoms company expects revenue growth of over 4 percent this year. Shares reacted negatively.